BUREAtt cF tArrEa^iAL REVENUI

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REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
FEB 1 71t72
Quezon City
RECORDS r-.G r. DtVtS|ON
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FEB 21 i':it

REVENUE MEMORANDUM CIRCULAR NO. 2I-ULL

SUBJECT: Tax Compliance Reminders for the May 09,2022 National and Local Elections

TO : All Internal Revenue Officers and Others Concerned

This Circular is being issued in relation to Revenue Regulations (RR) No. 8-2009 and
Revenue Memorandum Circular (RMC) No. 3 l-2019 to remind everyone, particularly those
who are running as candidates or participating in any other manner in the May 9,2022 National
and Local Elections, of their obligations under pertine_.nt revenue issuances.

I. BIR REGISTRATION

All candidates, political parties/party list groups and campaign contributors, are
required to register with the BIR, issue official receipts and withhold taxes pursuant to RR No.
8-2009, as amended by RR No. 7-2011 and other related revenue issuances. The registration
of political parties or party list groups shall be made with the Revenue District Office (RDO)
having jurisdiction over their Head Office or principal office.

It shall be the duty of every individual candidate and political parties/party list groups,
upon the filing of the certificate of candidacy, whether for local or national position to register,
or to update their registration with the BIR for those who have previously registered as
Withholding Agents pursuant to RR No. 8-2009. The registration shall be made with the RDO
having jurisdiction over the political subdivision where the candidate is seeking election, and,
if this is not applicable, registration shall be made at the RDO having jurisdiction over their
principal residence or registered head/principal office address, as the case may be.

The individual candidates shall be required to submit the following:

a. Duly accomplished BIR Form No. I 901 [for individual candidates not yet registered
or registered as business taxpayer, individual candidates registered as local
employees, registered under E.O. 98 and/or One-Time Transaction (ONETT)];
b. Any identification issued by an authorized government body (e.g. Philsys ID, Birth
Certificate, passport, driver's license) that shows the name, address and birthdate of
the applicant;
c. Certificate of Candidacy (COC) from the Commission on Election (COMELEC).
Individual candidates shall be registered as "Professional - In General" and tagged as
"Politician" under the special code in the BIR registration system.

The political parties/party list groups shall be required to submit the following:
a. Duly accomplished BIR Form No. 1903; and
b. COC from the COMELEC.

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Political parties/party list groups shall

code in the BIR registration system.

Individual campaign contributors shall be registered under E.O. 98 as taxpayer type

with the RDO having jurisdiction over his place of residence using BIR Form No. 1 904. Non-
individual campaign contributors shall be registered with the RDO having jurisdiction over its
principal place of business/head office using BIR Form No. I 903.

The RDO shall maintain the list of all registered candidates and political parties/party
list groups for monitoring and updating of its registration record after election.

II. ANNUAL REGISTRATION FEE AND CERTIFICATE OF REGISTRATION

All candidates and political parties/party list groups shall pay anAnnual Registration Fee
(ARF) in the amount of five hundred pesos (P500) and be issued a Certificate of Registration
(COR). COR is no longer required to be issued for individual candidates who are not engaged
in business.

III. REGISTRATION OF BOOKS

All candidates and political parties/party list groups shall keep books and other
accounting records such as Cash Receipts Journal (basis for Statement of Contributions for
submission to COMELEC), Cash Disbursement Book (basis for Statement of Expenditures for
submission to COMELEC) or their equivalent and register the same to the concerned RDO.

Individual candidates may opt to use a simplified set of bookkeeping records, as long as
it can provide accurate information.

IV. ISSUANCE OF BIR REGISTERED NON-VAT OFFICIAL RECEIPT

All candidates and political parti eslparty list groups shall also register Non-VAT Official
Receipts (ORs) to be issued for every contribution received, whether in cash or kind valued at
Fair Market Value. The original copies of such ORs shall be issued to the contributor/donor
while the duplicate shall be retained by the issuing candidate/political partylparty list.

Candidates may opt to buy BIR Printed Receipts or apply for an Authority to Print using
BIR Form No. 1906 with the concerned RDO.

V. INCOME TAX

As a general rule, campaign contributions are not included in the taxable income of the
candidate to whom they were given, the reason being that such contributions were given not
for the personal expenditure/enrichment of the concerned candidate, but for the purpose of
utilizing such contributions for his/her campaign. Thus, to be considered as exempt from the
income tax, these campaign contributions must have been utilized to cover a candidate's
expenditures for his/her electoral campaign during the campaign period.

Unutilized/excess campaign funds, as well as donations utilized before the campaign

period, net of the candidate's or political party'slparty list's campaign expenditures, shall be
considered as subject to income tax and as such, must be included in their/his taxable income
as stated in their/his Income Tax Return (ITR) pursuant to RRNo. 7-2011, to wit:

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1. Individual Candidates T }D
RDS GT. DIVISIO N
In case of those registered as professional or those previously registered as
self-employed individual who branched-out for the purpose of election period
following the guidelines above, unutilized/excess campaign funds shall be
declared forthe quarter ending June 30 using BIR FormNo. 1701Q and shall
be filed on or before August 1 5 of the same taxable year.

b. In case of a candidate who is purely compensation income earner within the

taxable year, he/she shall file BIR Form No. 1700 to include such
unutilized/excess funds on or before April 15 of the following taxable year.

c. In case of a candidate who is neither a self-employed nor a compensation

income earner as of the date of election, he/she shall declare such
unutilized/excess campaign funds by filing a short-period return for the
period-covering January I up to the date of election (2nd Monday of May)
using BIR Form No. 1700 on or before August l5 of the same taxable year.

2. Political Parties/Party list Groups

The unutilizedlexcess campaign funds shall be reported in the manner by which

domestic corporations are required to file their returns and pay taxes.

It should be noted that no further deduction, either itemized or optional, shall be made
against the said taxable income. Further, any candidate or political partylparty list group,
whether winning or losing, who fails to file with COMELEC the Statement of Contributions
and Expenditures required under Omnibus Election Code shall be automatically precluded
from claiming such expenditures as deductions from the campaign contributions making the
entire amount directly subject to income tax.

VI. DONOR'S TAX

Both Section 94 (a) of Batas Pambansa Bilang 881, otherwise known as the Omnibus
Election Code of the Philippines, and the final paragraph of Section 13 of Republic Act No.
7166 provide that contributions in cash or in kind to any candidates, political parties or party
list groups, duly reported to COMELEC, are exempt from the imposition of Donor's Tax.

It is hereby emphasized that only those donations/contributions that have been

utilizedlspent during the campaign period as set by the COMELEC are exempt from donor's
tax.

Donations made by corporations in violation of Section 36(9)t of the Corporation Code

of the Philippines are subject to donor's tax and may not be deducted as political contribution
on the part of the Donor/corporation.

t Section 36(9) of the Corporation

Code of the Philippines provides:

"Sec. 36. Corporate powers and capacity.

- Every corporation incorporqted under this Code has the power and
capacity:
xxx xxx xxx
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VII. WITHHOLDING OF TAXES
RECORDS MGT. DIVISIO N
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Income payments made by political candidates and political parties/party-list groups on
their purchases of goods and services as campaign expenditures, and income payments made
by individuals or juridical persons for their purchases of goods and services intended to be
given as campaign contribution to political parties and candidates shall be subject to five
percent (5%) creditable withholding tax pursuant to RR No. ll-2018. The following are
considered among those covered by expanded withholding tax, but not limited to payments for:
(a) media services, (b) printing jobs, (c) talentlentertainment fees, (d) rentals of both real and
personal property/ies. Likewise, BIR Form No. 2307 (Certiftcate of Creditable Tax Withheld
at Source) shall be issued upon demand.

Expenses incurred by the candidates which were given free of charge, such as use, rental
or hire of land, water or aircraft, equipment, facilities , apparatus and paraphernalia used in the
campaign shall be assessed by the candidate and declare the amount commensurate with the
expenses for the use thereof, based on the prevailing rate in the locality and shall be included
in the total campaign contributions received and expenses incurred by the candidate.

Deadline the five (5oh) percent Creditable Withholding Tax (CWT) shall be filed and
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remitted not later than the last day of the month following the close of the quarter during which
the withholding was made, using BIR Form No. 1601-EQ through Electronic Filing and
Payment System (eFPS)/eBIRForms Package or AABs or RCOs under the jurisdiction of the
BIR Office where the withholding agent is registered. As withholding agents, they are also
required to submit the Quarterly Alphalist of Payees (QAP) (available for download in the
"downloadable" section in the BIR website) through the esubmission facility of the BIR.

The payor/withholding agent, who may be an individual candidate, apolitical partylparty

list group, or any juridical entity, is further required to file the Annual Information Return of
Creditable Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR
Form No. 1604-E) as well as the Statement of Contributions and Expendituies duly stamped
"Received" by the COMELEC on or before March I following the year of election.

Expenses that were not subjected to the 5% CWT as herein required are not considered
utilized campaign funds, and the candidates, political parties/party-list groups are precluded
from claiming such expenditures as deductions from hisiher/its campaign contributions. As
such, the full amount corresponding to said expense shall be reported as unutilized campaign
funds subject to income tax.

VIII. PRESERVATION OF ACCOUNTING RECORDS

All political parties/party list groups and candidates shall be responsible for the
preservation of records and contributions and expenditures, together with all pertinent
documents, shall be retained in accordance with the rules on preservation of books of accounts
and other accounting records provided in Section235 in relation to Sections 203 and222 of
the NIRC of 1997.

9. xxx Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or
candidate or.for purposes of partisan political activity;"
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 IX. POST.ELECTION
Every candidate and Treasurer of the political parties/party list groups shall submit the
Statement of Contributions and Expenditures to COMELEC and RDO where the
candidates/political parties/party list groups are registered within thirty (30) days after the
election.

The registration of individuals in their capacity as candidates shall automatically end

ten (10) days after the deadline of filing of the Quarterly Remittance Return of Creditable
Income Taxes Withheld (BIR Form 1601 EQ) following the day of the election.

The CSS Chiefs of the concerned RDOs shall cancel the Branch code of those that
were registered as Branch and end-date the Form Types 0619-E, 1601EQ and Tax Type WE
of individual candidates, for purposes of election, that were registered and/or updated. Those
candidates who are not engaged in business shall be reverted to its previous taxpayer type, e.g.
EO 98 or Local Employee. However, the political parties including party list groups shall
subsist, unless they opt to update their registration.

X. PENALTIES

All candidates, political parties and party list groups who failed to register and comply
with the requirements of the BIR will be subjected to penalties under the Revised Consolidated
Schedule of Compromise Penalties for Violations of the National Internal Revenue Code
(NIRC) of 1997, as amended (RMO No. 7-2015).

All internal revenue officers and employees are hereby enjoined to give this Circular a
wide publicity as possible.

J/W.^luf-*.y
DULAY
CAESAR R.
Commissioner of Internal Revenue

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